Danielle DiMartino Booth: Special Fed Meeting Review – Could the Fed be Missing the Mark?
Tom welcomes back Danielle DiMartino Booth, she is CEO and Chief Strategist for Quill Intelligence, a research and analytics firm.
Danielle DiMartino Booth provides a comprehensive overview of the Fed’s balance sheet reduction policy, implications of this policy, and changes to the voting committee. She believes that the current mortgage rates are too high, making it difficult for the Fed to hit their target of rolling off $35 billion of mortgage-backed securities each month. This has resulted in losses of $1.25 trillion over the first three quarters of the year.
Tom suggests that the Fed should do a study of how inflation got so high. Danielle counters that the Fed has some pretty good ideas. She also mentions that the job openings data has been disproved by academics and that a large portion of job postings are for poaching successful employees.
Danielle expects Powell to be patient until the effects show up in the fiancial market.
Lastly, she notes the upcoming rotation of the voting committee which is shifting in a dovish direction but Powell has veto power to push back against dissenters.
Time Stamp References:
0:00 – Introduction
0:43 – Fed News & Damage
6:28 – Job Opening Data
8:40 – BOE Intervention & Fed
10:35 – Mortgage Rates & MBS
12:05 – Fed Security Losses
13:08 – Inflationary Causes?
15:04 – Fed Doves Are Flocking
16:45 – Powell’s Powers & FOMC
18:17 – Wrap Up
Talking Points From This Episode
- The job openings data is being used by Chair Powell to justify his decisions, even though it is not reliable.
- The Fed’s balance sheet reduction policy and its potential implications are discussed, as well as the upcoming changes to the voting committee.
- Why the Fed should investigate how inflation got so high.
Danielle DiMartino Booth is CEO and Chief Strategist for Quill Intelligence LLC, a research and analytics firm.
DiMartino Booth set out to launch a #ResearchRevolution, redefining how market intelligence is conceived and delivered, with the goal of not only guiding portfolio managers but promoting financial literacy. To build QI, she brought together a core team of investing veterans in analyzing the trends and providing critical analysis of what drives the markets.
Since its inception, commentary and data from DiMartino Booth’s The Daily Feather have appeared in other financial sources such as Bloomberg, CNBC, Fox Business, Institutional Investor, Yahoo Finance, The Wall Street Journal, MarketWatch, Seeking Alpha, TD Ameritrade, TheStreet.com, and more.
A global thought leader on monetary policy, economics, and finance, DiMartino Booth founded Quill Intelligence in 2018. She is the author of FED UP: An Insider’s Take on Why the Federal Reserve is Bad for America (Portfolio, Feb 2017), a full-time columnist for Bloomberg View, a business speaker, and a commentator frequently featured on CNBC, Bloomberg, Fox News, Fox Business News, BNN Bloomberg, Yahoo Finance and other major media outlets.
Before Quill, DiMartino Booth spent nine years at the Federal Reserve Bank of Dallas, serving as Advisor to President Richard W. Fisher throughout the financial crisis until his retirement in 2015. Her work at the Fed focused on financial stability and the efficacy of unconventional monetary policy.
DiMartino Booth began her career in New York at Credit Suisse and Donaldson, Lufkin & Jenrette, where she worked in the fixed income, public equity, and private equity markets. DiMartino Booth earned her BBA as a College of Business Scholar at the University of Texas at San Antonio. She holds an MBA in Finance and International Business from the University of Texas at Austin and an MS in Journalism from Columbia University.